Small Farms Insurance

Ellen Smith of Pittsford, N.Y. sparked a terrific conversation when she wrote in regarding her trouble finding homeowners insurance that would allow her to sell eggs from her pastured hens. Citing a potential salmonella liability, her insurance provider at the time informed her she had to stop selling the eggs or risk losing her policy. Well, you jumped right in, sharing your own stories and offering possible solutions. You can find readers letters here and here. Read Ellen's original letter here.

Whether you're selling eggs, milk, meat or other homestead products, share your experiences and tips regarding small farm insurance in the comments section below. 





Post a comment below.

 

Muddy Fork Farm
4/12/2008 12:32:42 AM
We had our homeowners insurance canceled, the insurance company claims that they canceled us because we heat with wood!! When you have a mortgage this type of thing doesn't sit well with the bank so they have aquired "Mortgage Insurance" and they are tacking the premiums to the end of the mortgage (at least this amount is not added into the principle that is acrueing interest). Talk about your BIG RED FLAG! So in hopes to obtain insurance I moved out of the non-electric log home we are building and back into and old mobile home that is on the same property, but has an electric furnace. New problems! Most companies will not even consider a mobile home that is older than 10yrs old ours is 26! I did almost find one company to cover us, they said that the age of the trailer was not a problem with them. However as soon as I mentioned that we have livestock they could not longer help. They told me that they cannot cover a mobile home on a farm policy. Does anyone have know of any insurance carriers that could fill our needs?

A VAUGHN
3/18/2008 10:48:33 AM
One of my policy holders brought the problem of Ellen Smith, Pittsford, New York to my attention and asked why this could be allowed to happen. The obvious answer is that the homeowner policy does not allow for this “farming type exposure” to be covered under the liability portion of the policy. I am surprised that there is not some company that is filed to due business in New York that will not be able to be of assistance to her. I have been a broker in California since 1978 and have always had a “Country Lifestyle”, “Gentleman Farmer” or “Small Farm” policy available to sell. California probably has more lawyers than New York and we all know that lawsuits drive the availability and the price of insurance and since the “homeowner” policy does not cover “commercial” property and since the word “commercial” includes the word “farm” there is no coverage. That is where a good broker begins to earn their money. My office represents approximately 60 different markets and I know of at least 4 companies who would put a policy together by adding a simple endorsement to the homeowner policy to allow for the “farming” exposure. Two others would write her a “country lifestyle“ policy if she lived in California. I suggest that Mrs. Smith contact a broker who represents more than just 1 insurance company. Bob Clouse

A VAUGHN
3/18/2008 10:07:59 AM
One of my policy holders brought the problem of Ellen Smith, Pittsford, New York to my attention and asked why this could be allowed to happen. The obvious answer is that the homeowner policy does not allow for this “farming type exposure” to be covered under the liability portion of the policy. I am surprised that there is not some company that is filed to due business in New York that will not be able to be of assistance to her. I have been a broker in California since 1978 and have always had a “Country Lifestyle”, “Gentleman Farmer” or “Small Farm” policy available to sell. California probably has more lawyers than New York and we all know that lawsuits drive the availability and the price of insurance and since the “homeowner” policy does not cover “commercial” property and since the word “commercial” includes the word “farm” there is no coverage. That is where a good broker begins to earn their money. My office represents approximately 60 different markets and I know of at least 4 companies who would put a policy together by adding a simple endorsement to the homeowner policy to allow for the “farming” exposure. Two others would write her a “country lifestyle“ policy if she lived in California. I suggest that Mrs. Smith contact a broker who represents more than just 1 insurance company. Bob Clouse

A VAUGHN
3/18/2008 10:07:29 AM
This addresses the dilemma faced by small "homestead" type farms which desire to sell some produce, including animals/animal products (chickens, eggs, lamb, hogs, etc.) and who are now denied homeowners insurance as the result of such activity. As understood, the regular insurance companies are now refusing to offer insurance as they have been in the past because of fear of liability in the event of illness claimed by purchasers of the farm products. (How much of this is fueled by Big-Ag is of interest but not helpful to the solution.) Since there are many farms now in this situation, as well as a great deal more to come, the potential exists to form a co-operative insurance association. The insured elements are generally loss of house or other structures by fire or storm and personal liability for injury occurring on the farm. Based on historical statistical information and using the current premiums as a guide, a cooperative can quickly be formed with the members paying their existing premiums and pledging to provide a pro-rated supplement in the event of catastrophic loss exceeding the funds available to the co-op. For instance, if the membership at first consists of 1,000 members and each pledge a maximum exposure of $1,000, then this generates a one million dollar fund which can be called upon if, and only if, needed. Obviously if there were 10,000 members then the fund is 10 million. The premiums would pay the program administrator for operating expenses and handle normal claims. Somewhere out there is a knowledgeable insurance (perhaps retired) person who would help get this set up. The first step is to get a website and advertising to sign up interested potential members. Working from there, the necessary rules and documents can be generated. Good luck! Dick Olsen

A VAUGHN
3/18/2008 10:06:39 AM
Having to battle insurance companies and the insurance industry in general is usually something the small business owner never considers when thinking about starting or expanding a small business. That being stated, it seems that some underwriter made some uninformed decision and once denied insurance by one company, if you state why you were denied to the next carrier you solicit for coverage it raises a red flag. Now to the true questions: "Don't most eggs and poultry products have the potential to carry salmonella?" "Since this is a potential from any supplier and the best method of protecting the consumer is for the person preparing the food product to properly cook it, how does that make the supplier the only responsible party?" We have dealt with this issue since the beginning of time, but now it seems that our litigious society now allows us to not be responsible for ourselves and rush to find someone or something to blame when we don't follow good food preparation practices or fail to be informed about the world around us. As a closing note, I grew up on a small farm in the late 1940's through the mid 1960's. We had our own eggs, raised our chickens to butcher, our pork, beef, and milk were produced on the farm and in fact the milk was not treated in anyway. We canned many garden and meat products, moved to the freezer when the farm was electrified in the early 1950's and that process continued while my parents lived at the farm and continues today with the family members that still work the family farm. Of course there is less gardening today, but the meat products are still handled the same way. My wife and I buy our eggs from a cousin whose daughter has chickens for 4-H and frankly feel we are intelligent enough people to know how to prepare the eggs or other farm products raised outside of corporate farm protection(?). Larry Mangus





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